TAXATION AND VOTING RIGHTS IN MEDIEVAL ENGLAND AND FRANCE Yoram Barzel and Edgar Kiser ABSTRACT We explore the relationship between voting rights and taxation in medieval England and France. We hypothesize that voting was a wealth-enhancing institution formed by the ruler in order to facili- tate pro®table joint projects with subjects. We predict when voting rightsand tax paymentswill be linked to each other, as well asto the projectsinducing them, and when they will become separated. We classify taxes into three types: customary, consensual and arbitrary. Customary taxes that did not require voting were dominant in both countriesin the early medieval period. Thesepay- ments, ®xed for speci®c purposes, were not well suited for funding new, large-scale projects. Consensual taxation, in which voting rightsand tax paymentswere tightly linked, wasusedto ®nance new, large-scale collective projects in both England and France. Strong rule-of-law institutions are necessary to produce such taxes. In England, where security of rule remained high, the rela- tionship between tax payments and voting rights was maintained. In France, an increase in the insecurity of rule, and the accompany- ing weakening of voting institutions, produced a shift to arbitrary taxation and a disjunction between tax payments and voting rights. These observations, as well as many of the details we con- sider, are substantially in conformity with the predictions of our model. KEY WORDS . medieval history . taxation . voting Introduction The relationship between taxation and voting rights has been a central issue in political philosophy and the cause of signi®cant poli- tical disputes, as `no taxation without representation' exempli®es. Yet social scientists have neither developed a theory nor conducted empirical analyses of the relationship. In this article, we spell out conditionsunder which the linksbetween voting rightsand tax Rationality and Society Copyright & 2002 Sage Publications (London, Thousand Oaks, CA and New Delhi), Vol. 14(4): 473±507. [1043±4631(200211)14:4; 473±507; 027740] 474 RATIONALITY AND SOCIETY 14(4) payments will be strengthened or weakened. We address several speci®c historical questions, including: (1) Why was consent via voting in medieval states required for some taxes but not for others? (2) What is the relationship between the decline of feudalism and the development of voting institutions? And, (3) Why did the French nobility ®rst pay direct taxes, then get an exemption from them, while their English counterparts paid throughout? Medieval taxation consisted of distinct types of taxes whose pur- pose changed dramatically during the period. Schumpeter ([1918] 1954) referred to this change as the transition from `domain states' to `tax states' and Weber ([1922] 1968) called it the transition from `traditional' to `rational-legal' formsof authority. Their typologies, however, do not suit our purposes, since they do not focus on the relationship between taxation and voting rights. We distinguish among customary taxes, which do not require voting rights, consen- sual taxes, for which voting isrequired, and arbitrary taxes, which the ruler can set at will. Schumpeter's `domain state' roughly matches our customary taxation, but his `tax state' does not differ- entiate between consensual and arbitrary taxation ± a distinction central to our analysis. Weber's `traditional authority' combines both our customary and arbitrary forms of taxation, and his `rational-legal' authority can include the arbitrary aswell asthe con- sensual form which he sees as dominant. Schumpeter (1954: 16) arguesthat rulers'needsto ®ght more frequent wars led to the transition from a domain state to a tax state. The ruler's increased need, however, does not explain why consensual taxation replaced customary taxation in some places but arbitrary taxation replaced customary taxation in others. In addition, it takestwo to ®ght. Schumpeter'sargument focuseson the response of one state but fails to explain why wars became more frequent. We address these issues and provide an explanation of the transitions from one type of taxation to another. Weber, mainly interested in typology, did not provide a causal analysis of the transition from traditional to rational-legal forms (Bendix 1960: 383). Studying the relationship between taxation and voting in medieval England and France in the early stages of the development of their voting institutions is relatively easy.1 The voting institutions and tax systems that exist in contemporary democracies are complex structures that have been modi®ed over the centuries. Both voting and taxes in most modern states encompass numerous state policies KISER & BARZEL: TAXATION AND VOTING RIGHTS 475 (projects), each of which affects different subsets of citizens. For that reason, it is dif®cult to disentangle the causal relations between tax payments, voting rights, and state projects. The number of projects initiated in medieval voting institutions is small. Both English and French state taxes were con®ned mostly to war ®nance. These circumstances greatly simplify the empirical exploration of our argu- ments.1 Although reliable quantitative data on taxation in this period are lacking (Major 1960: 21; Henneman 1967: 295),2 qualita- tive data exist that allow us to test our model. Our central hypothesis is that consensual taxation emerged as a result of the cooperation between (individually maximizing) rulers and subjects when acting as business partners. By this view, new taxes, to be spent at the ruler's discretion, were not extortionary pay- ments but rather investments in particular projects. Ef®ciency requiresthat the partnersof joint venturesshareboth in the venture's decision-making and in its residual. Speci®cally, when the contributorsto a project have voteson itsmanagement propor- tional to their (marginal) contributions(taxeshere) and to their share in the reward, the expected net income from the project is maximized. The collaboration, then, isexpected to increasethe size of the pie to be divided between the ruler and his voting subjects. The formation of voting institutions is an unintended consequence of the collaboration. The agreementsbetween rulersand subjectsare enforced by long- term relations.3 Enforcement isespecially fragile in the formative stages of the voting institutions. In Barzel (2000) and Barzel and Kiser (1997), we single out three factors that reduce the value of voting institutions and cause their decline: (1) exogenous shocks, (2) increases in the heterogeneity of voters' interests in state projects (see also Hoffman and Norberg 1994: 310), and (3) increases in the insecurity of rulers. The ®rst two factors did not change signi®cantly in France relative to England during the study period. The third factor, however, is useful for us because it changed in France much more than in England and it affordsusthe opportunity to test the main propositions of this article. In sharp contrast to our approach, most explanations of the emer- gence of medieval voting institutions are based on a zero- or nega- tive-sum game. They assert that initially the rulers were able to impose taxes arbitrarily (Poggi 1978; Tilly 1990; Olson 1993). As the nobility and other groupsgained more power, they forced the king to transfer voting rights to them and to reduce their tax 476 RATIONALITY AND SOCIETY 14(4) burden. These writers also contend that both voting rights and tax paymentsre¯ect only the relative power of rulersand subjects(e.g. Tilly 1990: 64). They argue that assubjectsbecame more powerful they got voting rightsand were able to avoid paying taxes,while those becoming weaker were forced to pay taxes and were excluded from voting. For example, Poggi (1978: 36±42, 60±61) states that the development of medieval representative assemblies is caused by the increasing power of towns, and that their decline, and the resulting disjunction between tax payments and voting rights, is due to the increasing power of rulers. Viewing all taxesasthe consequenceof only relative power cannot account for the actual relationships between taxation and voting rightsin the medieval period (Hoffman and Norberg 1994). We agree that in the Middle Ages, as is the case in general, relative power determined the (initial) distribution of wealth and the cor- responding tax burden. Rulers' attempts to impose new taxes, however, required consent. Moreover, the rich and powerful sub- jects who voted for taxes imposed them almost exclusively on them- selves rather than on poor and powerless subjects who lacked voting rights. Our argument that in the medieval era rulersand subjectsmade certain agreements that set the relationships between taxes, voting, and state projects is illustrated in medieval maxims that sound like platitudesbut in fact re¯ect the agreed-upon behavior. One maxim regarding the relationship between the state and its subjects was that `what touchesall should be approved by all' (Strayer 1971). It wascommon to feudal law, customary law, and revived Roman Law in medieval Europe. We suggest that this maxim re¯ected real practicesand wasnot an empty exhortation. A ruler who sought an extraordinary service or payment for a project he pro- posed had to ask for the approval of those affected by it. This maxim indicatesa mode of behavior that correspondstoour basic premise: all asked to pay new taxes (i.e. beyond the initial customary payments) should have a say on it. One way of having a say is through voting rights. This maxim also implies that when the origi- nal `customary' taxes were set the ruler securely committed not to increase them or raise new ones without the consent of all taxpayers. Another maxim, one whose implementation would af®rm the previous one, was `when the cause ceases, the effect also ceases'. Tax payments in medieval Europe were linked to speci®c projects. The particular project is the `cause' for which a tax was requested, KISER & BARZEL: TAXATION AND VOTING RIGHTS 477 most often a looming war, and the `effect' was the tax collected for the project. If the war did not materialize, the investment shares were expected to be returned, and, in fact, they usually were (Brown 1972).